Mark's on the Park $($MOP$)$ is a highly successful restaurant known for their weekend brunch. Given the success of the restaurant, one Music Flow is a streaming music service specializing in podcasts. Music Flow generates revenue through subscriptions that requires

customers to pay using a credit card. Consider the following events for Music Flow in Year $1$:

Music Flow earned $$502,000$ of subscription revenue during Year $1.$

Music Flow submitted the credit card receipts to the credit card company immediately. The credit card company paid Music Flow

cash in the amount of face value less a $1$ percent service charge.

Required:

Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of

cash flows. More specifically, record the amounts of the events into the model. Also, in the Statement of Cash Flows column, classify

the cash flows as operating activities $($OA$),$ investing activities $($IA$),$ or financing activities $($FA$).$

Note: Enter any decreases to account balances and cash outflows with a minus sign. Leave cells blank if no input is needed.

$*$Red text indicates no response was expected in a cell or a formula$-$based calculation is incorrect; no points deducted.

of Mark's friends, Mr$.$ Lowe, asked for some financial help to open a similar restaurant in a nearby town. The following events relate to

the loan from MOP to Mr$.$ Lowe:

On March $1,$ Year $1,$ MOP loaned Mr$.$ Lowe $$60,000$ for one year at $5$ percent interest.

On December $31,$ Year $1,$ MOP recognized accrued interest on the loan.

On March $1,$ Year $2,$ MOP recognized accrued interest.

On March $1,$ Year $2,$ MOP recognized the collection of the note including all interest.

Required:

Use a horizontal financial statements model to show how each event affects the balance sheet, income statement, and statement of

cash flows. More specifically, record the amounts of the events into the model. Also, in the Statement of Cash Flows column, classify

the cash flows as operating activities $($OA$),$ investing activities $($IA$),$ or financing activities $($FA$).$ An example of a horizontal statements

model is shown below:

Note: Enter any decreases to account balances and cash outflows with a minus sign. Leave cells blank if no input is needed.